June 21 (Bloomberg) -- BlackBerry is poised to snap a five-quarter streak of declining smartphone shipments, a sign its
recovery is gaining traction.

BlackBerry probably delivered 7.7 million smartphones to
customers in the three months ended in May, a Bloomberg survey
of analysts shows. That would reverse a plunge to 6 million
units in the prior quarter from 11 million a year earlier for
the Waterloo, Ontario-based company.

New models are the reason for the resurgence. Even if the
touch-screen Z10 is getting a mixed consumer reception, pent-up
demand for the Q10, which has a physical keyboard to appeal to
the BlackBerry faithful, is fueling a rebound, said Maynard Um,
a Wells Fargo & Co. analyst.

“The die-hard BlackBerry installed base of 76 million
subscribers loyal to the keyboard presents a strong upgrade
opportunity,” said Um, who is based in New York and rates the
stock the equivalent of a buy.

Um is among analysts who have raised sales estimates or
ratings on BlackBerry in the weeks before the smartphone maker
reports earnings on June 28. While BlackBerry steadily lost
market share over the past three years to Apple Inc. and Samsung
Electronics Co., it now has an opportunity to win back some
consumers in the lull before the next iPhone arrives and after
Samsung’s Galaxy S4 got mixed reviews.

“The new BlackBerry handsets are holding up reasonably
well against a number of recently released handsets,” said Andy
Perkins, an analyst at Societe Generale SA in London. Perkins
lifted his rating on BlackBerry from a sell to a buy last week,
citing the phones’ better sales momentum.

Fumble Culmination

BlackBerry slid 1.5 percent to $13.78 at the close in New
York. The shares have climbed 16 percent this year and have more
than doubled since reaching a nine-year low in September. An
international BlackBerry service disruption that month, which
coincided for a second time with the introduction of a new
iPhone, was the culmination of years of marketing fumbles,
product delays and other missteps by the company.

Since taking over in January 2012, Chief Executive Officer
Thorsten Heins has named new sales, marketing and legal chiefs
and squeezed out $1 billion in operating costs by cutting six of
10 manufacturing sites, eliminating 5,000 jobs and selling one
of two corporate jets.

BlackBerry surprised analysts in March by reporting a
return to profitability for its fiscal fourth quarter, earlier
than expected. The company probably had a profit of 9 cents a
share excluding one-time charges and gains in the first quarter,
which ended in May, reversing a loss of 37 cents a year earlier,
according to analysts’ estimates.

Sales Gain?

Sales probably climbed 20 percent to $3.38 billion from a
year earlier, the estimates show. That would be the first year-on-year gain in eight quarters.

BlackBerry has no comment on its performance last quarter,
said Rebecca Freiburger, a company spokeswoman.

Heins, a native of Germany, was criticized after he was
promoted from chief operating officer to CEO 18 months ago and
told investors no “drastic change” was needed at BlackBerry.

Regardless of what he said at the time, Heins has
definitely shaken things up, said Colin Gillis, a BCG Partners
LP analyst.

“He’s done a great job -- he’s put up way more of a fight
than people were expecting,” said Gillis. “The question is, is
it too late?”

Twenty-two analysts, including Gillis, rate BlackBerry a
sell, 12 call it a hold, while nine recommend buying the stock.

Q10 Peak

BlackBerry’s shipments are expected to decline again this
quarter. In the current period, which will end in August, units
will decline to 7.4 million from last quarter’s estimate of 7.7
million, according to the Bloomberg survey. That’s because
shipments of older models will fall while sales of the Q10 will
potentially peak after a wave of upgrades, said Gillis.

“This is the quarter where they’re likely to put product
into the channel and the numbers may look pretty good,” he
said. “The next quarter is probably going to be tough for
them.”

BlackBerry’s share of the global smartphone market shrank
to 2.9 percent last quarter from 6.4 percent a year earlier,
according to research firm IDC. Apple’s iOS and Google Inc.’s
Android operating system, which Samsung uses, together accounted
for 92 percent of the market.

BlackBerry was knocked out of third place by Microsoft
Corp.’s Windows Phone platform, which finished March with a 3.2
percent share. Still, Microsoft’s new phones haven’t made huge
inroads with consumers, leaving BlackBerry in the running for
third place, said BGC’s Gillis.

Stacy Drake, a Microsoft spokeswoman, declined to comment.

“Microsoft haven’t blown the doors off that space to
secure that third space in the ecosystem,” said Gillis. “It’s
still an open race.”